Parks Chevrolet – Credit Help

Special financing is the auto lending industry sector for automobile purchasers with poor, blemished or limited/no credit history. First-time car buyers can also fall into the special financing category, due to little or nonexistent credit history. In the auto industry, special financing is risk-based – this means that the loan terms are set in such a way so that the expected returns to the lender are substantial enough to cover any risk of default by the borrower. Typically, special finance auto loans have a higher interest rate than what would be available to borrowers with good credit history.

Bad credit auto loans loans are offered by many auto dealerships that work with financial organizations and institutions that focus on the special finance buyer – in this case, customers with bad credit history (which would be reflected in a low credit score/poor credit report from one of the credit reporting agencies). Bad credit can be defined in several ways:

• The individual has failed to pay a debt in the past.
• A financial industry term that describes a person who would be considered a high risk to lending institutions and finance companies
• Can also be considered a condition, where a person's past credit history includes bankruptcy, late payments, county court judgments (CCJ), payment defaults, individual voluntary arrangement (IVA), and the like.
• Low Beacon Score

Poor credit is a credit rating above bad credit; generally, poor credit is considered a credit score between 580 and 640. While a person with poor credit still isn't a "good" credit risk (or loan candidate), the credit score generally reflects a better credit risk than someone with a bad credit rating.

As mentioned above, special finance loans are for individuals with bad credit, poor credit, or otherwise tainted credit history, and these special finance loans will generally have a higher interest rate than what would be offered to borrowers with good credit history. And, as previously noted, special financing is available – it's up to the borrower to shop around for the best financing available under the circumstances.